Recycling Turns Criminal

Rising commodity prices expose East Bay businesses to a new source of theft.

During the first six months of 2007, Pacific Gas and Electric Company lost an estimated $122,013 to East Bay wire thefts, according to company spokesman David Eisenhauer. Rogue recyclers have been stealing copper wiring, pipes, and other metals from PG&E utility boxes and under manhole covers. Local law enforcement and recyclers have since helped the utility recover more than $48,000 in stolen metal.

Industry experts and police say such criminal recycling is quickly growing to epidemic proportions. Some might picture scrap metal recyclers as environmentally conscious, politically active, and devoutly organic. But officers from theft units in the Berkeley, Oakland, and Alameda police departments say many are methamphetamine addicts who swipe reachable, removable wires, pipes, or gutters and sell them to junkyards willing to turn a blind eye. Thieves target construction sites, abandoned buildings, basements in older homes, and businesses after dark.

"PG&E got hit pretty hard by these guys," said Officer John Koster, who saw his share of scrap thefts during his years on the Oakland Police Department's narcotics and theft units. "They're pretty good. I'd have to say about 90 percent of the copper thefts are by meth users. They'll hit buildings inside and out."

And it's unlikely they'll stop anytime soon, he said. "It'll continue until someone stops buying the stuff — until it becomes harder and harder to find," Koster said. "If you're a recycling center and some guy comes in with 500 pounds of copper wire, you'll just melt it down, and it literally becomes untraceable. But someone's doing it. Someone's buying it."

Industry experts say the proliferation of such theft is driven by two seemingly stratified market forces — the international demand for non-ferrous metals and the number of tweakers looking to sell scraps to buy a quick fix.

The trend, which Koster and other police first took notice of about three years ago, owes to the dramatic upswing in metal values and high demand for alloy scraps in China and other international markets. Prices for the copper have tripled since 2005, according to a Recycling International market analysis issued last December. China upped its copper imports by more than 43 percent last year alone.

"Recycling, what we usually think of as an environmental behavior, is very much an economic behavior," said scrap metal historian and Berkeley native Carl Zimring, who has authored a book about the industry, titled Cash for Your Trash: Scrap Recycling in America. "Metals are a commodity, and when someone knows they'll get more money for it, the market for illegal resale goes up. One problem the scrap industry has faced since its beginnings is the question of where these secondary materials come from."

Metal's hard-to-determine provenance gives recycling yards a tough job, Zimring said. Since metals are so easy to melt down, and because much of the wiring turned in as scrap is stripped bare, there's little reliable indication of where it came from. "It's not like at a pawn shop where if someone turns in a laptop or something you can check the serial number and see where it's from," added Koster. "Copper pipes, steel, iron, they don't have that." Thieves sometimes even steal from one junkyard, then turn around and sell to another in a neighboring city or across town, he said. Or at least he thinks they do. "It's hard to track."

About a month ago, a group of intruders cut a hole in the wall of a warehouse at Lakeside Non-Ferrous Metals. The alarm scared them off before they took anything, and owner Lance Finkel said he didn't call the police. "I didn't have enough information to turn in," he said. "Plus, a lot of times, they don't even show up."

Instead, Finkel hired a private security outfit to keep would-be burglars at bay. The uniformed presence must have scared them off — guards have yet to report suspicious characters near the yard's premises. "Law enforcement is not doing enough," said Finkel, who gets most of his scraps from other yards as opposed to individual scrap sellers.

To avoid getting strapped with stolen junk, Finkel said his employees screen suspect sellers. "If they can't give the right answers to our questions, that's a tip-off," he said.

Vehicles offer another tempting target for scrappers. Cars and trucks outfitted with catalytic converters left unbolted by the manufacturer are falling prey to a coast-to-coast string of "cat burglaries" because of the speck of platinum at the mechanism's core, which alloy scrappers can resell for as much as $120. Cat cons cost upward of $2,000 to replace, according to industry standards released by the American Automobile Association. Oakland police say there is "a significant underground market" for these stolen converters, despite the denials of local recycling center employees.

The petty cash that these crimes produce hardly seems worth the trouble until you remember that the scrappers "aren't into financial planning," said Zimring, who has studied the history of the scrap business for more than a decade. "These are people who don't want a ton of money."

Though the bottom-of-the-barrel thieves don't want much, scrappers on the top of the food chain make millions when it all adds up, Zimring said. "When the pilfered copper, for example, gets added up, the guy on top buys his from his 200 to 300 clients, and gets tons of it to sell to a mainstream manufacturer — a car manufacturer or one in China," Zimring said. "Then we get the stolen metal back in a new laptop or jewelry or car, and there's no way to tell where it came from in the beginning."

This year looks to be no better for metal theft, judging by market forecasts that predict price increases for copper, steel, and precious metals.

Although local and national authorities point to copper as the scrap of choice, metals aren't the only cheap cash-in. Scrappers get even thriftier than that, and are increasingly selling off one of the cheapest recyclables imaginable — paper.

Criminal recyclers have been known to cash in on fresh-off-the-press free newspapers. Recycling centers overlook the dates and sheer quantity of the publications, which thieves bring in by the stacks of hundreds and thousands, still neatly folded, newly printed, and obviously never-read. Sure, it's free for a copy or two, but when recyclers make off with hundreds or thousands of copies, publishers report losing thousands of dollars in profit, which has led several to push authorities to view large-scale paper swipes as grand theft.

A private investigator recently hired by the East Bay Express helped Oakland police apprehend two people who were stealing thousands of copies of free publications in Oakland. Bay Area publishers are now forming a consortium to address such thefts. But, as with metals, paper prices are expected to climb by as much as 35 percent in the first quarter of 2008, which Zimring said will probably spur thieves to keep thieving.

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